Should you be paid the UK minimum wage, UK living wage or London living wage? Find out which one applies to you to ensure you are receiving the right salary in the UK.
The national UK minimum wage is based on a minimum UK wage per hour, applicable to all jobs in the UK. The government reviews the minimum wage in the UK annually in April, after taking advice from an independent body called the Low Pay Commission.
All UK employers must agree to pay at least the national minimum wage (NMW UK) to workers up to the age of 25. For workers older than 25 years, the national UK living wage (NLW) instead applies, which is set at around 50 pence higher than the NMW.
The amount of UK minimum wage that workers receive depends on which age bracket they fall into. To be entitled to the UK minimum wage they must be of at least school leaving age, which is generally 16 years old in England.
This guide explains everything an expat needs to know about the differences between the UK minimum wage and the living wage in the UK, the rate of UK minimum wage in 2018, plus steps to take if you are being underpaid and not receiving the UK national minimum wage.
What is the UK minimum wage?
The minimum wage in the UK has steadily increased in recent years, at an annual rate of between 20–30 pence per hour since 2009. The UK minimum wage is calculated at an hourly rate but applies to all types of work in the UK even if the employee is not paid per hour (including payments per project).
According to the European Commission in 2018, the UK minimum hourly wage compared favourably to almost all of its European neighbours by ranking seven out of the 22 countries included in the study. However, this still places the UK minimum wage lower than Luxembourg, the Netherlands, Belgium, Germany, France and Ireland.
In addition to full-time employees, any workers who fit in the following categories are entitled to the minimum wage in the UK:
- Apprenticeship (different wage applies)
Apprentices are entitled to an apprentice rate if they’re aged under 19 or are in the first year of their apprenticeship. If you’re over 19 or beyond your first year, you should be paid the full UK minimum wage for your age group.
The minimum wage for apprenticeships is set at £3.70 per hour in 2018.
Self-employed workers in the UK, company directors and volunteers are not required to receive the UK minimum wage.
UK minimum wage and living wage in 2018
The UK national minimum wage is reviewed annually and varies depending on the employee’s age. The most recent increase in April 2018 represented a 4.7% rise, expected to put an extra £600 in full-time workers’ pockets per year.
The UK minimum and living wage rates in 2018 are:
|Age||UK minimum wage per hour 2018||2017|
|25 years and older||£7.83 (national living wage, NLW)||£7.50|
|Under 18 years||£4.20||£4.05|
UK living wage
The UK national living wage (NLW) was introduced in April 2016, requiring employers to pay any staff aged 25 or older a higher wage (around 50 pence higher) than the national minimum (NMW). As of April 2018, the UK living wage is £7.83.
The UK statistics office (ONS) reported that the main age groups positively affected by the creation of the national living wage were 25–29 year olds and those older than 60, from which some 9% of workers were previously paid below the NLW.
London living wage versus minimum wage
London’s minimum wage is the same as the national average, despite the cost of living in London being significantly higher than in many other parts of the UK. This has led to criticism that the UK living wage (NLW) still isn’t high enough, especially for workers in London, as well as in southeast England.
The Living Wage Foundation calculates what it considers the ‘real’ cost of living each year; it also partners with a group of businesses who agree to pay what they consider the UK’s and London’s ‘Real Living Wage’, although it is paid on a voluntary basis.
The organizations claims that the compulsory living wage should be set at £8.75 per hour across the UK, and at £10.20 per hour in London.
This movement has been popular in the UK, with almost 4,000 employers paying the voluntary ‘Real Living Wage’. You can ask your employer which minimum wage standard applies to your workplace.
UK minimum wage calculator
If you’re paid on a weekly or monthly salary, you should work out your equivalent hourly rate to check you’re being paid at least the UK minimum wage. To help you do this, the UK government provides a minimum wage calculator.
UK minimum wage for expats
If you’re an expat in the UK, you are also entitled to be paid the UK national minimum wage or living wage, plus enjoy the same rights as UK citizens in terms of paid annual leave and sick pay too.
What to do if you’re paid less than the UK minimum wage
While most companies abide by the UK’s minimum wage legislation, some still attempt to pay less than the amount required. The government reported in December 2017 that 260 employers failed to pay the UK minimum wage, and owed a combined total of £1.7m in back pay to 16,000 workers.
If you think you’re being paid below the correct rate, you should first check your UK work contract and speak to your employer. If this doesn’t work, you should request payment records in writing from your company. You can also contact the ACAS helpline for confidential advice if required.
The government’s employment and tax department (HMRC) can fine your employer if it finds they haven’t been following UK minimum wage regulations, and if necessary can take them to court on your behalf.